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Guest blog: Funding your Passivhaus or Low Energy Self-Build Project

If you’re thinking of embarking on a self-build project, the energy use of your new home is going to be an essential consideration. Lower bills and reduced environmental impact are just two encouraging reasons to prioritise energy-efficiency from the outset.

As for any self-build project, a new home that’s being constructed to a high energy efficiency standard needs rigorous budgeting in the early stages of your planning to ensure it’s within scope of what you can manage. Let’s look at a few approaches that might help keep costs under control during your eco self-build.

Land purchase

Finding the right plot can be the most challenging part of any self-build and will be the biggest single purchase that you make during the project. In areas where demand is high, land may account for around 50% of the total value of the completed house. If you haven’t secured a site, as well as scouring development land sales in your target area, you can register with your local authority under the Right to Build schemes. Remember that, while some lenders may be able to help you to buy your plot, others will only provide support if you already have a plot to offer as security.

An essential way to manage the cost of land purchase is to take a flexible approach – no doubt you’ll have mentally scoped out your perfect plot but being prepared to compromise on certain things will be essential. In comparison to greenfield plots, brownfield sites tend to be relatively affordable upfront and are also more likely to be connected to mains services, which can be a major money-saving consideration (unless your ambition is to go off-grid!). They are also typically viewed in a more favourable light when it comes to securing planning permission.

If you’re hoping to install certain renewable technologies into your home, your choice of plot will affect their feasibility. For example, a clay top-layer tends to create more favourable conditions for a ground source heat pump than chalk because its density enables it to retain heat for longer, whereas if you’re building on chalk you will likely require significantly more collector coils, which will add to your costs.


There will be a seemingly never-ending number of design choices to be made and decision-making fatigue is likely to strike at some point. However, thoroughness during the design phase is important in avoiding potentially costly mistakes further down the line.

One of the first things to consider is the orientation of your build, which can have a huge impact on your home’s energy requirements. Under the Passivhaus methodology, it’s recommended that, where possible, your home is oriented to face within 30 degrees of due south (in the Northern hemisphere). This will enable you to make best use of the sun’s energy, particularly in the winter months. With considered planning, it’s not impossible to build to Passivhaus standard where a southerly-facing aspect can’t be achieved, however this is likely to mean that your building’s annual heating demand will be considerably higher.

At the design stage, you’ll want to factor in the longer-term financial savings that any energy-efficiency measures will achieve and take these into account when totting up how much the installation of such features is going to cost. Passivhaus buildings typically achieve a 75% reduction in space heating requirements, compared to standard UK new builds – an important consideration when forecasting your home’s costs. And if you hope to sell your build further down the line, bear in mind that an EPC A or a Passivhaus rating is likely to be an attractive prospect to potential buyers.


Resist the temptation to buy a plot without planning permission on the basis that it’s cheaper and will save you money. Planning for a new single dwelling in England currently costs £462. Given that obtaining planning could increase the value of a relatively inexpensive plot to one that’s worth several hundreds of thousands of pounds, there’s likely a reason if it’s being sold in the absence of any permissions. Of course, there’s nothing to stop you applying for prospective planning permission for a plot that you like and making an offer to the seller that’s contingent upon it being granted.

Doing your research ahead of submitting your planning proposal can save you the cost of having to re-draft plans and re-submit your proposal. While there is often a charge, it may pay to seek pre-application advice from your local authority and it’s worth doing your research on the council’s track record of approving certain types of builds. If you’re prioritising energy-efficiency and sustainability, this may help your application to be received more positively.


The construction type that you decide on during the design phase will have a big impact on the costs that are incurred once building works commence. Some of the more recently available options in this area can significantly reduce construction time while delivering excellent build quality and energy efficiency. For example, off-site modular construction using materials like cross-laminated timber may mean that your home is up in weeks rather than months, potentially equating to big savings in labour. However, make sure you factor in transportation costs.

If you’re demolishing an older building, make the most of any opportunities to reclaim materials for use in the new build – broken bricks and rubble can be used for hardcore while old timbers that are in decent condition can be integrated into the structure or repurposed as cladding.

If you’re managing the build yourself rather than employing a project manager, it can enable you to make substantial savings providing you have the time to enable you to keep a close eye on everything and are willing to take on the pressures of coordinating multiple trades. As new builds are exempt from VAT, be sure to keep an accurate record of your costs as the build progresses so that you can submit your VAT reclaim upon completion.


Approach the financing of your project as an integral part of the process at an early stage. Self-build mortgages tend to take a little longer to reach a conclusion, so applying for a mortgage at a late stage risks delaying your project.

Choosing the right mortgage provider is arguably more critical for self-builders as the lender will become a major partner, with a vested interest in the progress of your project.

Unlike a traditional residential mortgage where a single advance is generally made on completion of purchase, self-build mortgage payments are released in stages. These staged releases reflect the progress and increasing value of the lender’s security (your new home) from plot purchase to obtaining detailed planning consents and then the build phases through to completion.

There are lenders out there, including Ecology Building Society, that provide tailored self-build mortgage products and, just as importantly, are familiar with how a self-build project needs to be assessed. And our unique C-Change mortgages incentivise energy efficiency through our mortgage pricing.

Every self-build is unique and presents its own set of challenges. However, the importance of careful planning and budgeting apply whatever your end goal and it’s important not to rush the early stages of your project. Placing energy efficiency at the heart of your build from the very beginning means that you can enjoy longer-term savings on your bills while reducing your household’s environmental impact.

Daniel Capstick, Mortgages Manager, Ecology Building Society

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